George Deeb, Managing Partner at Red Rocket Ventures, recently mentored the 2016 class of entrepreneurs at Founder Institute Chicago. Here is the presentation he delivered on "Product Development for Startups". The lesson provides high level guidance on: (i) doing your market research; (ii) setting the product vision and roadmap; (iii) creating product specifications; (iv) building a development plan; (v) doing UX testing; (vi) when to build internally or externally; (vii) building budgets; and (viii) setting development KPIs to manage by. This is a must read for any entrepreneur, to learn how best to build their first products. You can see the matching video of this presentation at this Vimeo link: https://vimeo.com/188424711 Please follow us on Twitter at: @RedRocketVC or @georgedeeb

1. Product Development
By, George Deeb
October 19, 2016
@RedRocketVC www.RedRocketVC.com 312-600-7560

2. Managing Partner (2010 to Date)
Chairman & CEO (2008-2010)
Founder & CEO (1999-2008)
Investment Banker (1991-1999)
BBA-Finance (1987-1991)
About George Deeb

3. Do Your Research
Industry
- Understand high level trends and needs
Competitors
- Know what you are up against, and be better
Prospective Customers
- Ask what are their current painpoints
- Ask their reaction to where you are heading
- Get them to be free pilot customers during testing period

4. Product Vision/Roadmap
Build a Business, Not a Functionality
- Clearly think through revenue plan and functionality
Gather Inputs From All Stakeholders
- Employees across depts, technologists, customers
MVP to Start
- Honda now, Rolls Royce later
- Initial architecture decisions could create long-term hurdles
Think Through a Three Year Plan (Product is Never Done)
- How will Version 1.0 evolve into Version 2.0 and 3.0
Protect Your Intellectual Property
- Get good legal advice here on patents and contracts

5. Product Specifications
KISS: Keep It Simple Stupid!
- The easier it is to use, the more people will use it
- It is better to drive “wisdom”, than “widgets”
Pick Platforms
- Will you need each of Android, iOS, Web? Start small.
Pick Coding Languages
- Should you code in HTML, Java, Python or Ruby?
Design vs. Development Plans and Teams
- Need to optimize for both, they are NOT the same thing
Involve Marketing
- Incorporate social sharing into your product design

6. Development Plan
Agile Software Development Process
- Two week sprints and regroup with new learnings
Beta vs. Version 1.0
- Get your MVP live as beta and start testing it
- Not officially Version 1.0 until you have tested and are happy
New Code vs. Open Source
- Don’t reinvent the wheel, plenty of free software out there
Hosted Internally vs. The Cloud
- Don’t incur big overhead day one, leverage the Cloud

7. UX Testing
Watch Users Play With Your App
- Is the interface intuitive—are they doing what we intended
- Is the product engaging—does it suck them in from start
Leverage Key Technologies
- Take advantage of A/B testing—which version works best
- Many tools for eye-tracking and user testing

8. Inhouse vs. Outsource
Are You a Technical Founder?
- Then building your own team, probably makes sense
Are You NOT a Technical Founder?
- Either need to partner with a technical co-founder
- Or, engage a development agency for your MVP
- Perfectly fine to start with agency, but internalize long term
What Do VC’s Prefer?
- Ultimately, you will need your own team to attract capital
Get Good Legal Protections in Both Cases
- Make sure all employees, agencies or contractors sign all
copyrights over to you

9. Estimating Costs
Project Manager’s Time
Developers’ Time
Designers’ Time (including UX time)
QA Time
Third Party Software Licenses
– CMS, database, ad serving, credit cards, email mgmt, etc.
Hardware Needs
Cloud Services/Hosting/Domains
Legal Time to Protect IP (e.g., contracts, patents)
Proof-of-Concept Marketing Support
Whatever You Estimate . . . Build In Cushions to Be Conservative!!

10. Development KPIs
Staying On Time—Break Into Bite Size Parts
Staying on Budget
Quality Control Metrics
Productivity/Resource Utilization Metrics
Site Performance Metrics
Support Desk Metrics
User Satisfaction/NPS Metrics
Employee Satisfaction Metrics
Financial Return Metrics
- Shoot for a 10x ROI on your development spend
However Long You Think It Will Take . . . Double It!!

11. Further Reading
http://www.RedRocketVC.com
Lesson #20: Setting Your Product & Pricing Strategy
Lesson #36: Picking The Best Technology for Your Startup
Lesson #70: Protect Your Intellectual Property
Lesson #73: Consumer Usability Testing
Lesson #118: Market Research for Startups
Lesson #129: “Productize” Your Business for Maximum Efficiency
Lesson #170: Your Proof of Concept is More Important Than Product
Lesson #172: Don’t Finalize Tech Dev Plan Until You Involve Marketing
Lesson #197: R&D and Sales Must Be Tied to the Hip
Lesson #230: Evolve From Selling “Widgets” to Selling “Wisdom”
Lesson #232: Do You Own The Copyright to Your Own Technology
Lesson #238: Continue to Innovate, or Die a Slow Death
@georgedeeb